It is for the digital out. It is a trs to RCA, the RCA would be the digital in of a dac, like the Hugo.

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Many times on daps you get some wrap around, so that the imaging to the right and left tend to be in your ears. The DX90 keeps this out in a more flat plain, were the sounds should be coming from, so you have a nice wide soundstage and one that keeps recorded sounds out where they should be. It also maintains a nice natural depth, if the recorded that way.